Gold prices rise today on festive demand but silver rates fall

New Delhi-India (Oct 11) Gold prices today rose Rs 130 to Rs 31,980 per 10 gram, supported by increased buying from local jewellers amid festive season demand. Global gold prices also inched higher today as share markets in Asia and the US plunged to multi-month lows and the dollar weakened, but gains were limited by the prospect of multiple rate hikes by the US Federal Reserve over the next year. In Delhi, gold rates of 99.9% and 99.5% purity rose by Rs 130 each to Rs 31,980 and Rs 31,830 per 10 gram, respectively, according to a Press Trust of India report. Sovereign remained steady at Rs 24,600 per piece of eight gram.

Gold prices had gained Rs 200 on Wednesday.

On the other hand, silver prices fell today with silver ready down by Rs 200 to Rs 39,000 per kg. Silver coins however remained unchanged at Rs 73,000 for buying and Rs 74,000 for selling of 100 pieces.

In global markets, spot gold rate was up 0.3% at $1,198.04 an ounce. US gold futures were up 0.7% at $1,201.6 an ounce. Meanwhile, spot silver rate was up 0.1% at $14.38 an ounce

The rupee today hit a fresh all-time low but later rebounded from the lows. At 4.03 pm, the rupee was trading at 74.13 a dollar, up 0.1% from its Wednesday’s close of 74.22. In the morning trade, the rupee had touched a fresh low of 74.46 a dollar, tracking sell-off in the global markets.

Despite weak global gold prices, domestic prices in India have remained higher due to the rupee’s fall. The currency so far this year has fallen over 14% against the US dollar, pushing up the imported cost of gold. India’s gold imports in September dropped more than 14%, according to the estimates of precious metals consultancy GFMS, as a rally in domestic prices has hurt demand. The drop in demand from Indian importers could weigh on global gold prices, which have dropped 8.8% so far this year.

In contrast India’s gold imports in August had nearly doubled from a year ago to 85.7 tonnes as lower prices prompted manufacturers to stock up ahead of the festive season. Demand for gold usually strengthens at the end of the year on purchases for the traditional wedding season and major festivals including Diwali and Dussehra, when bullion buying is considered auspicious. Investment demand in gold has started to improve due to a falling stock market and the depreciating rupee, Reuters cited a bullion dealer as saying.